Wednesday, September 26, 2012

Another city in California facing bankruptcy

Whether Atwater, California will join the prodigious ranks of Stockton, San Bernardino, and Mammoth Lakes to become the 4th Muni bankruptcy is up for vote on October 3rd (before a $2mm bond payment in November). As Bloomberg notes, the 28,000-strong Merced county town is suffering under the same weight of public employee costs, lost revenue, and a stagnant economy leaving it with a $3.3 million budget deficit. While some put their hope in the FB IPO, perhaps Bernanke should have mandated investment in AAPL for all these municipal comptrollers? The median income is 19% below the national average as the foreclosure crisis - which saw Atwater's median home price drop by more than half - has depleted property-tax revenues dramatically. "We just started negotiating with our unions and they are going to have to take a major cut," Mayor Joan Faul said. "We hope that once we declare a fiscal emergency, that they will realize that we are definitely in an emergency. If they want to save all the jobs, everyone is going to have to take a cut,"

Via Bloomberg Briefs:

Atwater, California, is going broke under the weight of public employee costs, lost revenue and a stagnant economy, pushing it toward becoming the state’s fourth city to seek bankruptcy protection. The city of 28,000, situated among Merced County’s dairies and almond groves about 100 miles southeast of San Francisco, has a $3.3 million deficit that may leave it insolvent before year’s end, according to budget documents.